The majority of countries with above average levels of group-based economic inequality are located in sub-Saharan Africa, according to fDi’s analysis of data for 179 countries.
Some 46 sub-Saharan African countries have an ‘uneven economic development’ index score above the median score of 5.2, according to the 2023 Fragile States Index compiled by The Fund for Peace, a non-profit. In 2023, the most unequal nation with an index score of 9.6 out of 10 was the Central African Republic, which has been in turmoil since a violent takeover of power in 2013.
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Haiti was the only country outside sub-Saharan Africa to have an index score above nine, but was closely followed by Madagascar, Mozambique, Somalia and Zambia. On the flip side, the most equal countries are mostly high income and located in northern Europe.
The Fund for Peace’s ‘uneven economic development’ indicator combines quantitative and qualitative factors to show levels of group-based equity. It demonstrates the extent to which countries offer all its citizens inclusive access to essential services, like education, health and basic sanitation, and whether citizens can improve their economic status through access to employment and job training. This is one of 12 interdependent indicators that make up its Fragile States Index, which measures risks and vulnerability in countries across the globe, including brain drain and human capital flight.
Nate Haken, the vice president of research and innovation at The Fund for Peace, says that uneven economic development is “both a cause and effect of fragility” within countries. He notes that uneven resource allocation and infrastructure development can cause a “vicious cycle” of rural to urban migration, particularly as environmental factors such as droughts drive people to leave more rural settings.
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Uneven economic development is associated with different outcomes for people in more and less affluent areas and can reduce the attractiveness of countries to investment. Government policies often aim to reduce regional disparities in terms of investment and economic opportunities for people.
A lack of equitable access to services for specific regions and ethnic groups within countries is often associated with the rise of communal nationalism. “In a context where there is uneven representation in government this can lead to opposition and conflicts,” says Mr Haken. Countries with particularly high levels of uneven development can be associated with long-term risks for investors and companies due to the threat to the safety of staff and the risk of assets being abandoned or damaged.
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The vast majority (62 out of 87) countries with above average levels of economic inequality were either lower-middle-income and low-income countries. On the other hand, more equal countries tend to have high-income economies. Norway was the most equal with an ‘uneven economic development’ index score of 1.4, followed by Iceland, Finland, the Netherlands and Luxembourg, which all had scores below 2. The US has an uneven economic development score of 4 despite having one of the highest levels of income inequality in the world. This demonstrates that the index covers more than just income inequality.
While years of uneven development due to inequity of investment and infrastructure are hard to unwind, Mr Haken notes there are some prominent examples of countries that have improved in the indicator. For example, Uganda has seen its uneven economic development score fall from 8.5 in 2008 to 7.1 in 2022, although it rose again to 7.4 in 2023.
A Peace, Recovery and Development Plan was implemented by the Ugandan government in July 2008 as a means of creating lasting peace in the northern regions, which had been ravaged by more than two decades of civil war. Mr Haken says this is an example of policies that can be used to effectively reduce disparities between regions.